Module 7 Assessment - Douglas GA Silber 6/18/10 11:01 AM...

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Douglas GA Silber 6/18/10 11:01 AM Self-Assessment 7 Completed 8 out of 0 points
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Question 1 1 out of 1 points The Norran Company needs 15,000 units of a certain part to use in its production cycle. If Norran buys the part from Waterloo Company instead of making it, Norran could not use the released facilities in another activity; thus, all of the fixed overhead applied will continue regardless of what decision is made. Accounting records provide the following data: Cost to make the part = Direct materials, $3, Direct labor, $12, Variable overhead, $13, and Fixed overhead applied, $8. Cost to buy the part from the Waterloo Company = $27. What should Norran's decision be, and what is the total cost savings that would result? Answer Selected Answer: Correct Answer: Question 2 1 out of 1 points An old machine that originally cost $9,500 thus far has accumulated depreciation of $1,900. The remaining useful life is four years, with no salvage value at the end of its useful life. A new machine is now available that costs $8,500, with a useful life of five years and no residual value. The old machine could be sold now for $1000. The annual cash operating costs for the old machine are $5,000, but for the new machine they would be only $2,500. Gross revenue from the products would be $12,000 annually for either machine. The company should Answer Selected Answer: Correct Answer: Question 3 0 out of 1 points A project is accepted under the net present value method when Answer Selected Answer: Correct Answer:
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Question 4 1 out of 1 points Chicago Co. is interested in purchasing a machine that would improve its operational efficiency. The
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This note was uploaded on 06/21/2011 for the course ACCOUNTING 0116001 taught by Professor Bloom during the Spring '07 term at Santa Fe College.

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Module 7 Assessment - Douglas GA Silber 6/18/10 11:01 AM...

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